Surely this is illegal and if not it is immoral

archangel

archangel

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Scenario......I was in London at the weekend in a lovely hotel......swiped the debit card as requested and was informed that they would only debit the amount on checkout.... so no dramas there......until the next morning.......went to check out and the girl asked me to swipe my card again and I told her that I already done so......her reply was that this was that the first swipe covered the hotel in case I left without paying.....and the second was the actual payment.......WTF....I told her just to use it but she said she couldn't as it wasn't hotel policy...so I re swipe the card and then check my balance on my phone to be told that the original amount was "on hold"....so raised this with the receptionist and asked her to unhold it......her answer... "certainly sir! we will release it within 7 working days......".....I rang my bank to complain and they say that this is standard procedure with hotels and other leisure industries.......be forewarned people
 
Seems fairly standard practice, something to anticipate and/or question when checking in. Think things might work slightly differently between debit and credit cards too with how the holds work?

When travelling last year I was running a card close to its credit limit and asked a hotel to release the authorisation hold; they were able to type a few things in on the card machine and release the funds immediately rather than waiting for it to expire automatically.
 
i never use a debit card for this type of thing, thats what the security of a credit card is for
 
Hard to comment without knowing the hotels systems. It might be that front of house staff don't have access to alter card transactions for security reasons. I imagine a more senior / accounts staff member goes through routinely and clears them down within 7 days (again I imagine it's quicker, just say 7 to arse cover).

I also imagine it's quicker for the customer at check out just to raise a new transaction, especially for busy venues than wading through x days card processes.
 
Essentially it's only a pre-auth that's gone through, temporarily holding the balance. No funds are physically removed until the transaction is completed. Or unheld in this case when the auth is cancelled.
 
terryuk said:
i never use a debit card for this type of thing, thats what the security of a credit card is for
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Apparently they do this to credit cards also.

neil_g said:
Essentially it's only a pre-auth that's gone through, temporarily holding the balance. No funds are physically removed until the transaction is completed. Or unheld in this case when the auth is cancelled.
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I understand it is a pre auth but surely it would be as handy to just process it as a normal transaction on check out.....I have never had any money put on hold in a hotel before and I stay in hotels on a regular basis.....



I have been doing some research into this and it is amazing how rife this is....it is okay as long as you can afford to let your money to be put on hold....I was reading about one guy who booked a £1500 trip to Hong Kong...... he picked up his tickets at the Airport and when he arrived he found out that he was penniless in Hong Kong as the rest of what was to be his spending money had been put on hold.......as they took another £1500 when he picked up the tickets.....


I think that Companies should make their policy more clear........
 
archangel said:
......her reply was that this was that the first swipe covered the hotel in case I left without paying.....
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You know what to do next time then ;)

And yes I agree, immoral at best :(
 
archangel said:
I understand it is a pre auth but surely it would be as handy to just process it as a normal transaction on check out.....I have never had any money put on hold in a hotel before and I stay in hotels on a regular basis.....
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Like I say, would you like to hang around at check out while they potentially wade through 100s/1000s transactions?
 
It might be a pre authorisation, but it can cause problems. Credit cards hold the balance of outstanding transactions against your name, including pre auths. Fine until you realise that twice the amount paid is being held "pending" against your name, and if you are close to your limit then you might find your card declined in the next 7 days. Your balance is well clear but the card company just see that there is a potential transaction on it's way to them. The hotel won't help, and neither will the credit card company.
 
Pretty standard practice, although I do think it should be released instantly, not after 7 days. Just MHO

archangel said:
I understand it is a pre auth but surely it would be as handy to just process it as a normal transaction on check out.....I have never had any money put on hold in a hotel before and I stay in hotels on a regular basis.....
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Bet you have, just haven't noticed.
 
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boyfalldown said:
Pretty standard practice, although I do think it should be released instantly, not after 7 days. Just MHO
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I'd say within 24hours, once they have checked the room and been reassured you haven't nicked the towels/bathrobes/kettle/etc ;)
 
Yv said:
I'd say within 24hours, once they have checked the room and been reassured you haven't nicked the towels/bathrobes/kettle/etc ;)
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It has been 3 days since I checked out......rang hotel today to make sure that they are dealing with it and asking why it takes 7 working days when I can refund immediately if need be........even my insurance company managed to refund me inside an hour.......
 
archangel said:
It has been 3 days since I checked out......rang hotel today to make sure that they are dealing with it and asking why it takes 7 working days when I can refund immediately if need be........even my insurance company managed to refund me inside an hour.......
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I agree completely, they can do it immediately if they wanted to and I can't even see what the benefit is to them, it's only a hold, its not like its money earning them interest of something.
 
Yv said:
I agree completely, they can do it immediately if they wanted to and I can't even see what the benefit is to them, it's only a hold, its not like its money earning them interest of something.
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Because that takes effort to cancel the authorisation and they probable have better things to do than look up and cancel every auth. Individually as required so SOP of the hotel is likely just to let them auto expire...

To the OP PITA yes but nothing illegal at all...used to see it hundreds of times a month personally in my old job
 
Blank_Canvas said:
Standard - pretty much the norm in most hotels. It doesn't bother me.
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It's not a bother to me if they alert me to the policy......because I would have just threw the Kerry card into the reception and went about my way instead of standing in a queue to check out and then have them hold my cash in return......




After more research it seems that by holding your cash they actually gain from a daily interest rate from the bank for all monies retained.....not a bloody wonder they hold it for 7 working days.....
 
archangel said:
It has been 3 days since I checked out......rang hotel today to make sure that they are dealing with it and asking why it takes 7 working days when I can refund immediately if need be........even my insurance company managed to refund me inside an hour.......
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My dear boy-everything is automated. Reception staff are not authorised and have no knowledge of how to do such things. Likelihood is that financial control is done off site by a faceless department. So you suffer. Tough. You are only the ex customer.
 
MWHCVT said:
Because that takes effort to cancel the authorisation and they probable have better things to do than look up and cancel every auth. Individually as required so SOP of the hotel is likely just to let them auto expire...

To the OP PITA yes but nothing illegal at all...used to see it hundreds of times a month personally in my old job
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Shouldn't be that difficult to unhold......either they process the pre auth or swipe the same card for a refund.......
 
archangel said:
It's not a bother to me if they alert me to the policy......because I would have just threw the Kerry card into the reception and went about my way instead of standing in a queue to check out and then have them hold my cash in return......




After more research it seems that by holding your cash they actually gain from a daily interest rate from the bank for all monies retained.....not a bloody wonder they hold it for 7 working days.....
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I don't know where you've read that last nugget but it's complete b*****ks if the money never leaves your account how are they (vendor) going to earn interest on it

archangel said:
Shouldn't be that difficult to unhold......either they process the pre auth or swipe the same card for a refund.......
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Depends how big the hotel is or if it's part of a chain for instance could be potentially tens of thousands of cancellations a day from some of the biggest groups...likely enough work to staff a decent sized office...
 
Yv said:
I agree completely, they can do it immediately if they wanted to and I can't even see what the benefit is to them, it's only a hold, its not like its money earning them interest of something.
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i can see why they wouldnt refund on checkout - they need to wait and make sure you havent trashed the room, taken a dump in the shower (one of our bunkhouse guiests actually did that once) or stolen the bed , but 7 days does seem a bit excessive
 
big soft moose said:
i can see why they wouldnt refund on checkout - they need to wait and make sure you havent trashed the room, taken a dump in the shower (one of our bunkhouse guiests actually did that once) or stolen the bed , but 7 days does seem a bit excessive
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which is what I said a few posts up :lol:
 
I would NEVER use a debit card for this type of transaction - too much risk of bouncing something important like a mortgage DD when funds get held.
 
Yv said:
which is what I said a few posts up :LOL:
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you don't seriously expect me to read the whole thread do you ? ;)
 
archangel said:
Will be asking first and then paying in cash upfront
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Actually I meant walk out "without paying" they have your card,
that way you are only charged once no funds on hold etc ;)
 
MWHCVT said:
I don't know where you've read that last nugget but it's complete b*****ks if the money never leaves your account how are they (vendor) going to earn interest on it
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What he said.



Depends how big the hotel is or if it's part of a chain for instance could be potentially tens of thousands of cancellations a day from some of the biggest groups...likely enough work to staff a decent sized office...
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What I said. :D




I bet it is detailed fully somewhere in their terms, but who reads those ;)
 
MWHCVT said:
I don't know where you've read that last nugget but it's complete b*****ks if the money never leaves your account how are they (vendor) going to earn interest ..
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Apparently it does leave your account according to my friend google and they are legally obliged to refund it when all is well.....but then again I am only a poor punter who is p***ed off because of the lack of clarity............I am ok because I can still survive even with the money being held but i am sure there are loads of people who this would be a struggle..........NOT GOOD CUSTOMER SERVICE
 
neil_g said:
Also something I touched on earlier, the transaction portals often have all of your card details. Would you be happy for the front of house to have open access to that?
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I was in Argos recently and they were able to refund an amount of cash front of house just by swiping my card......money in account next day........in today's technological society it should be that hard to refund a card without having to divulge details........
 
They don't have to wade through authorisations.
Even fourteen years ago, Menzies Hotels held each pre-authorisation on the computerised reservation and they were accessible straight away.
Each was cancelled instantly on check-out.
 
archangel said:
Apparently it does leave your account according to my friend google and they are legally obliged to refund it when all is well.....
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Ah well if Google said it..

Pre auths do not require a refund as the money does not leave. The reservation of funds flag can be cleared though.

archangel said:
I was in Argos recently and they were able to refund an amount of cash front of house just by swiping my card......money in account next day........in today's technological society it should be that hard to refund a card without having to divulge details........
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My point was, depending on payment service they use, your full card details could be open to abuse. Purely speculation however without knowing what platform.

viv1969 said:
They don't have to wade through authorisations.
Even fourteen years ago, Menzies Hotels held each pre-authorisation on the computerised reservation and they were accessible straight away.
Each was cancelled instantly on check-out.
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See above. Speculation as nobody knows what platforms. Just trying to apply some logic based on what i know.

There must be good reason why they did it that way. Be it security, convenience or platform limitation. And as I said I'll eat my hat if it's not covered in the hotel terms.
 
archangel said:
It has been 3 days since I checked out......rang hotel today to make sure that they are dealing with it and asking why it takes 7 working days......
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OK, I think we're agreed that they're not actually refunding you, because they don't actually have your money, right? What they're doing is cancelling the 'hold', the pre-auth, on the money.

The problem is that they can go onto the card processing system and 'void' the transaction instantly, but what happens after that is out of their control. In theory the card issuer should infer that the hotel does not intend to settle the transaction, and should release the hold. In practice they don't necessarily do that. But exactly what does happen varies from one card issuer to another, and (for security reasons, I expect) there's a real lack of transparency into the process. Many issuers effectively ignore the request and leave the pre-auth transaction to lapse naturally, and that's why it can take up to 7 days.

We've found that it *is* possible to get pre-auths cancelled immediately, but it's a lot of work. We have to send a fax to an obscure department in the bank setting out chapter and verse of the transaction, our reasons for cancelling it, and swearing on oath that we won't try any funny business. It's a real hassle and we generally won't bother unless it's a really serious issue for the customer.

Does that explain it well enough?
 
StewartR said:
OK, I think we're agreed that they're not actually refunding you, because they don't actually have your money, right? What they're doing is cancelling the 'hold', the pre-auth, on the money.

The problem is that they can go onto the card processing system and 'void' the transaction instantly, but what happens after that is out of their control. In theory the card issuer should infer that the hotel does not intend to settle the transaction, and should release the hold. In practice they don't necessarily do that. But exactly what does happen varies from one card issuer to another, and (for security reasons, I expect) there's a real lack of transparency into the process. Many issuers effectively ignore the request and leave the pre-auth transaction to lapse naturally, and that's why it can take up to 7 days.

We've found that it *is* possible to get pre-auths cancelled immediately, but it's a lot of work. We have to send a fax to an obscure department in the bank setting out chapter and verse of the transaction, our reasons for cancelling it, and swearing on oath that we won't try any funny business. It's a real hassle and we generally won't bother unless it's a really serious issue for the customer.

Does that explain it well enough?
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No! :)
 
You don't get out much, do you? :D. This has been standard practice since plastic was invented. You should try the pre-auth on the hire of a premium car.
 
archangel said:
I was only joking:D it was all veryv clear and concise.......but still very wrong IMHO
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Yes, I agree. But it's the banks who are acting as the villains by not releasing the hold on your money. The hotel doesn't have any control over it.

(By the way, I agree that the hotel could and should have settled your original pre-auth rather than put through an entirely new transaction. But, as others have said, there could be any number of good or bad reasons why they do it. Inadequate IT systems would be my bet.)
 
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